Wednesday, September 30, 2015

New Zealand, Dairy and the TPP

New Zealand's been pushing hard for access to our agricultural markets under the TPP. It's worth remembering that the Kiwi agricultural sector has gone through major structural changes over the years: before Britain entered the Common Market, New Zealand had assured access to the British market but that vanished pretty much overnight with Britain's Common Market entry. The Kiwis resisted change for a long time, subsidizing and protecting everything in sight, before Roger Douglas forced through major economic restructuring. It was a major shock but NZ came out of it an agricultural powerhouse once again. Eventually comparative advantage triumphs. Painful, but maybe it would work for us, too, especially if we cushioned the transition but made it very clear that it was, in fact, a transition to an open market.